[cryptonx]

I dont think it will be ever laughed at

even the brilliance was not laughed at , worse case scenario will be ( Leaves alot to be desired ) or a 50% 50% reviews ... which isnt bad for a first chinese/american car .

ANd I can bet on that , time will tell .

 

[chinoy54]

i disagree, being laughed at in the american market is a costly way to tarnish the image of all chinese car makers, the ridicule and piss taking in the american press will be damaging. chery is not to be trusted with such responsibility

you give too much credit to chery for this. if you have read carefully the news article, you will note that:
1) the announcement was made by chrysler.
2) chery did not initiate the negotiations, chrysler did.
3) the eventual product will not have a chery badge, but a chrysler badge.

so, if there is anyone who will be ridiculed, pissed on, & tarnished, it will be chrysler.

 

[Real_I_Hate_China]

Chery's Hornet : A disaster in the making?

Here is the scope of deal.

- The car is based on an existing Chery; most likely the S12.
- Price range is $8,000 ~10,000
- Chery saw the biggest quality decline in 2006.

The question is, can S12 even pass the US crash and emissions regulations? With Chery's prices so high and a Toyota Yaris only $1,000 more, The Chery Hornet is a probable disaster in the making.

Even worse, S12 is a Matiz derivative based on its posted dimension. GM lawyers will have a field day on its arrival.

 

[hazik]

Does the Hornet have the same chassis as Chery S12

 

[Real_I_Hate_China]

Yes. Hence a poor performance in crash test is expected.

 

[hazik]

Does it have the same engine and gearbox as S12?

 

[AXLE]

Yes. Hence a poor performance in crash test is expected.

Uhh the Hornet has only been produced in concept form, and NO that was not based onto the S12 as it was produced before any talks of any Chery/Chrysler small car deal.

 

[Real_I_Hate_China]

NO that was not based onto the S12 as it was produced before any talks of any Chery/Chrysler small car deal.

It was clear from the beginning that Hornet would be built on builder's own chassis from the beginning. This is why the initial deal with VW fell apart because the Polo chassis cost too much.

Chrysler confirmed once again that the Hornet would be based on an existing Chery model; that leaves just two possible choices, QQ6 or S12. DCX is not providing any engineering; it is 100% Chery's responsibility to come up with a S12 variant wearing Hornet styling, to be available in 2008.

Now, are you still confident that Chery Hornet would still be able to compete with Toyota Yaris?

 

[Tiggo]

Aller hop~
For the future~ ^^

 

[AXLE]

Chrysler confirmed once again that the Hornet would be based on an existing Chery model... DCX is not providing any engineering...

Can you provide me with a link or source which can support what you are saying?

 

[Real_I_Hate_China]

http://www.columbian.com/news/APStories/AP12302006news88194.cfm

The cars, which already are being designed, would be based on an existing model but will be modified jointly by Chrysler and Chery engineers, Chrysler spokesman Jason Vines said Friday.

http://www.columbian.com/news/APStories/AP12302006news88194.cfm

Chrysler could use either the Polo or Jetta architecture to build the ~$10,000 Dodge Hornet. However, VW was unable to give the company an attractive enough price, according to the report.

The whole Hornet was nothing but a distribution deal. The supplier engineers and delivers the car, while Chrysler sells them under its own badge. No financial risk to Chrysler and Chery must bear all cost burdens.

 

[chinoy54]

The whole Hornet was nothing but a distribution deal. The supplier engineers and delivers the car, while Chrysler sells them under its own badge. No financial risk to Chrysler and Chery must bear all cost burdens.[/QUOTE]

i don't think we can assume that chrysler is not putting any money into the development & production of the eventual product. chery will surely put a price tag on the cost to produce, or else get a hefty share of the distributor's margin. i don't think chery is in this for love or experience. we're not privy to the details of the deal, so it's pointless to speculate. i'd rather wait for the eventual product & see if it's accepted by the market.

 

[Real_I_Hate_China]

i don't think chery is in this for love or experience.

But that's exactly the case here. Do a quick calculation and numbers don't add up. Chery is not making any money off this deal, or could even be losing money.

According to Chrysler, the MSRP starts at $8,000.

To reach that MSRP, Chery must ship out Hornet at $5,500 from Wuhu, or 44,000 Yuan. This is basically the ex-factory price of a QQ, but built with expensive imported high-strength galvanized steel(You cannot source high-strength galvanized steel from Chinese steel suppliers), a California emisssions compliant exhaust system, and dual airbags. Now you can see Chery could possibly be losing money from the Hornet deal.

 

[Hudson]

There's PLENTY of speculation here. There's another company doing the engineering and it hasn't been mentioned here...and it's not Chinese.

 

[chinoy54]

i see your point. but if you say that the ex-factory price of the QQ is $5,500, then shouldn't the actual cost to produce be somewhere around $4,000? W/ this figure, chery wouldn't be making very much, but so long as the product gains acceptance, the eventual msrp could be raised slowly w/ face lifts, more options, etc. to raise the margins.

since we're talking costs here, do you have an idea as to what a chinese manufacturer would consider as a fair net profit margin for every vehicle they produce?

 

[Real_I_Hate_China]

i see your point. but if you say that the ex-factory price of the QQ is $5,500

Base QQ retails for $3,600 in China, meaning the ex-factory price is lower, but not by much since Chery's average margin on QQ is $50 per car. You bet Chery is losing money on the $3,600 base model.

then shouldn't the actual cost to produce be somewhere around $4,000?

$5,500 is the maximum Chery could charge for base Hornet since an overhead of $500 China inland transport(Wuhu is a fucked up place to export cars since it is not located beachside like all export oriented Japanese and Korean auto factories), $1,000 seafreight, $175 import duty, warranty, and the US dealer margin of $500 per car. Note that I am not counting in Chrysler's profit since Chrysler would lure possible customers with the $8,000 MSRP but sell them $10,000+ loaded versions instead. The US inland freight is extra.

Think about it, how are you supposed to build a US regulation compliant car for $5,500 anywhere on earth, even in China? Toyota and Hyundai's next generation low-cost cars aimed at developing markets are priced at $8,000, and these models aren't even US regulation compliant.

W/ this figure, chery wouldn't be making very much, but so long as the product gains acceptance, the eventual msrp could be raised slowly w/ face lifts, more options, etc. to raise the margins.

Then there is no point of Hornet since it would approach the price of Japanese and Korean subcompacts in the US.

since we're talking costs here, do you have an idea as to what a chinese manufacturer would consider as a fair net profit margin for every vehicle they produce?

5% is a fair margin to auto-manufacturers, foreigners and Chinese alike. But it has become increasingly difficult to turn a profit in China because of ongoing price wars. As one observer notes, China is the only place on earth where the car price goes down each model year instead of going up.

 

[Raul]

As of now it is perhaps too early to speculate on this matter. What we do know is that DaimlerChrysler has the ability to improve Chery's building quality. It doesn't matter if the price comes close to Japanese and Korean subcompacts because Chrysler needs a small car to it's line-up. It will be interesting to see how this venture turns out. If it works, then other US car companies might follow this same method.

 

[Real_I_Hate_China]

As of now it is perhaps too early to speculate on this matter. What we do know is that DaimlerChrysler has the ability to improve Chery's building quality.

Do they? Chrysler always depended on Mitsubishi to supply them with chassis and powertrain engineering, and Chrysler/Dodge cars aren't known for build quality. DCX doesn't have much to offer in terms of engineering and quality assurance, nor are they even willing to offer them because of the fear of the boomerang effect.

It doesn't matter if the price comes close to Japanese and Korean subcompacts because Chrysler needs a small car to it's line-up.

Since S12 is a much less of a car than Japanese and Korean rivals, similar pricing only means no sales.

If it works, then other US car companies might follow this same method.

GM and Ford have better alternatives.

 

[Raul]

Do they? Chrysler always depended on Mitsubishi to supply them with chassis and powertrain engineering, and Chrysler/Dodge cars aren't known for build quality. DCX doesn't have much to offer in terms of engineering and quality assurance, nor are they even willing to offer them because of the fear of the boomerang effect.

I was mainly referring to DaimlerChrysler's German side. I believe that DC will send a team of German engineers to China to ensure that quality will be good enough for western markets (this means new factory, tooling etc.).

Since S12 is a much less of a car than Japanese and Korean rivals, similar pricing only means no sales.

At current state only estimations can be made regarding the final price of product. We will see it in the future. What comes to small cars in general they are now selling very well in the US because of high oil prices. If Chery's small car has good quality and has a price somewhere between $10000-$12000 it will certainly succeed (if they keep Hornet's appearance).

GM and Ford have better alternatives.

GM has sourced it's small car (Aveo, which isn't a huge hit) from South-Korea and Ford doesn't have a small car currently in it's line-up.

 

[erik (laofan) cmvdc]

Real I hate you know what .. you have forgotten the Chinese consumer taxes. Retail price of the cheapest QQ is 3000 yuan. Chinese taxes are about 25- 30 % (depending on the province and city), so this car can leave the factory for 2300~2400 yuan.